What is Canadian MSB? Canadian MSB Review, Features

Canadian MSBs are companies that provide currency trading and currency exchange services and must apply to the central bank for supervision and filing. This type of company must also be monitored in real time by the Financial Transactions and Reports Analysis Centre (FINTRAC) directly under the Ministry of Finance of Canada and be responsible to the Parliamentary Activities Centre to ensure national financial security.

About MSB Canada

Money services businesses (MSBs) must comply with specific obligations under the Proceeds of Crime (Money Laundering) and Terrorism Financing Act (PCMLTFA) and related regulations to help combat money laundering and the financing of terrorist activities in Canada.

There are two types of cash services businesses that must comply with obligations under the PCMLTFA: Canadian money services businesses and foreign money services businesses. The information that applies to each type of money services business is shown on a separate tab. When there is no tab, the information applies to both MSBs and FMSBs.

Canadian MSB Regulatory Conditions

1. A company registered in Canada;

2. Have a legal address in Canada;

3. Have a valid bank account in Canada;

4. Valid company contact number;

5. The compliance officer or legal person cooperates with the background check;

6. The business structure is appropriate, the internal monitoring system is sound, and the company's personnel have certain qualifications and experience in issuing digital currencies;

7. Good financial status;

8. The company’s directors and compliance officers are respectively responsible officers.

How to distinguish between MSB and FMSB?

Who is MSB?

1. You provide one or more of the following services

• Foreign exchange trading

A transaction that converts one currency into another (for example, USD into CAD).

• Remit or send funds

Send or transfer money from one person or entity to another using electronic funds transfer networks or any other methods such as Hawala, Hundi, Fei chien and Chitti.

• Issue or redeem money orders, travellers' cheques or anything similar

Your business issues or redeems money orders, traveler's checks, or other similar negotiable instruments. This does not include cashing checks payable to a specific person or entity.

• Cryptocurrency trading

Includes virtual currency exchanges and virtual currency transfer services.

• Fund-raising platform service

Providing and maintaining a crowdfunding platform for use by other persons or entities to raise funds or virtual currency.

2. Have a place of business in Canada:

• Registered in Canada;
• Have a business address in Canada;
• Have employees, agents or branches in Canada.

Who is FMSB?

1. No place of business in Canada

Not having a place of business in Canada means:

• Not registered in Canada;
• There are no physical stores in Canada;
• You have no employees, agents or branches in Canada.

Note: If you provide MSB services and have a place of business in Canada, you may be considered an MSB.

2. You provide services directly to individuals or entities in Canada

A business will provide services to a person or entity in Canada if at least one of the following conditions is met:

• The business's marketing or advertising is directed to persons or entities located in Canada;
• The business operates a ".ca" domain name; or
• The business is listed in the Canadian Business Directory.

3. Provide these services to customers in Canada

A customer is considered “in Canada” if they have ties or residency in Canada.

You can determine whether a customer is “in Canada” based on information obtained from your interactions with the customer, such as when verifying their identity. When a customer is “in Canada”:

• The customer’s address is in Canada;
• The document or information used to verify the customer's identity is issued by a Canadian province or territory or the federal government;
• The customer's bank, credit card or payment processing service is based in Canada.

Note: A person may be considered “in Canada” when they are temporarily living, attending school, working or vacationing outside of Canada.